The benefits of insurance are not always easily quantifiable (indeed, you hope they aren’t). However, insurance provides one of the greatest forms of protection you can get–peace of mind. In fact, insurance is such a powerful and effective way of protecting your interests that people have been doing it for thousands of years. But when was insurance invented? In this blog, we will explore the history of insurance from its inception to the modern insurance industry.
In the Beginning of Insurance...
The insurance industry began in seed-form approximately 5,000 years ago. Chinese traders would spread their risk of losing goods by putting them on a number of different ships. If one of the ships sunk, some of the merchant’s cargo would still reach shore.
Around the same time, the Mesopotamians created a surety system where the owner of cargo would borrow money and not pay it back until their cargo arrived safely. This provided a financial cushion for the entrepreneur. By around 500 B.C., the Murashu banking firm established an insurance system, making them the first insurance company.
Insurance in Early America
The insurance industry did not reach American soil until the 1750s with Benjamin Franklin. However, starting in the 1600s, especially with Pascal’s invention of the calculator, the European insurance industry was thriving. For example, property insurance rose out of the ashes of the Great Fire of London in 1666, and life insurance began developing between the 1500s and 1700s in England, France, and Holland.
In 1752, Benjamin Franklin, along with several other prominent citizens, founded the Philadelphia Contributionship for the Insurance of Houses from Loss by Fire, as a result of the frequency of fires in the city. Franklin’s fire insurance company was run similarly to insurance companies today. This company became the first American insurance company. Later, Franklin helped establish America’s first life insurance company, the Presbyterian Ministers’ Fund. Other types of insurance, such as auto insurance, arose in subsequent years.
Insurance Today
Today, there are over 1.2 million insurance agents and service employees in the United States. That’s more than double the population of the Tri-Cities, Tennessee. Additionally, numerous forms of business and personal insurance are required by law. Today, the insurance industry is a thriving industry offering security and peace of mind to billions of clients.
If you would like a free insurance quote, give our East Tennessee office a call at (423) 292-4142. As an independent insurance agency, we would be happy to help you find the right coverage for your needs.
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Sources: The History of Insurance – Investopedia, The History of Insurance in America – Investopedia, When was Insurance First Used – DailyHistory
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